File photo. Rizwan Tabassum—AFP
Business community rejects measure, noting it will be used to harass tax filers and destroy public trust in banking sector
The Federal Board of Revenue (FBR) on Monday withdrew a clause requiring authorities to warn taxpayers at least 24 hours prior to freezing their accounts, reversing a business-friendly measure that had been implemented two years ago.
“In order to implement the law in its true spirit and to re-vest the power vested in the institution of the commissioners viz-a-viz action under Section 140 of the Income Tax Ordinance, 2001, the instructions referred supra are hereby withdrawn ab-initio,” read the notification issued by FBR Inland Revenue Operations Secretary Hammad Hussain Jaffri.
The referred instructions, issued in 2019, stated: “No bank accounts attachment unless the taxpayer’s CEO/Principal Officer/owner is informed at least 24 hours prior to attachment and the chairman FBR’s approval is obtained.” It was implemented during the tenure of Shabbar Zaidi as chairman FBR.
“I am personally sorry to hear the withdrawal of the first instruction issued when I joined as chairman FBR,” Zaidi wrote on Twitter. “No freezing of bank account without intimation and approval from chairman FBR. Due to this there was a major relief to taxpayers. I urge P.M., F.M. [finance minister] and chairman FBR to reinstate,” he added.
“This will not only erode the taxpayers’ confidence but also discourage people who want to become taxpayers as there would be constant fear from tax collectors,” warned Zeeshan Merchant, president of the Karachi Tax Bar Association.
The business community as a whole had welcomed the 2019 announcement against attaching the bank account of any business house without prior notice. Prior to its implementation, taxmen would often issue unreasonable demands to meet their monthly tax targets, and recover the sum from bank accounts without informing the affected parties.